Home ownership can be one of the wisest financial decisions you ever make, but the process of buying your first home can feel daunting. Fixed or adjustable rates, property taxes, credit approval, interest rates so many moving parts and decisions can take away from this momentous life-step, leaving you feeling overwhelmed when you should be living in the moment.
Follow these 10 steps and your journey to home ownership will feel like a joyful pilgrimage to an exotic destination as opposed to a grueling marathon.
1. Start Your Search Online
For those home shoppers who are ready to explore the more traditional method of buying, starting their search online through well-known sites like Zillow, Trulia and Realtor.com is common. While this can give you a great overview of the current market, C21Redwood.com will not only show you homes that are active on the market, under contract and recently sold — our site also alerts you to homes that are COMING SOON! This behind-the-scenes insight boosts a buyer’s advantage, particularly in a seller’s market.
And if you’d rather ease into homeownership, a rent-to-own plan may be right for you. CENTURY 21 Redwood has collaborated with Home Partners of America to create a tool to search for rent-to-own homes, allowing you to experience living in the home before taking on all the obligations that come with home ownership. Each month’s rent becomes an investment in your future.
2. Consult With an Agent
Your real estate agent will be your lifeline throughout the homebuying process. When you’re really serious about buying, working with a relentless CENTURY 21 Redwood Realty agent will give you greater insight and improve your purchasing position.
Our 600+ agents offer pressure-free consultations, asking pertinent questions and listening intently to your needs. A buyer’s agent is free to first-time home buyers since the seller pays the sales commission. They will provide local market information to help you understand your options and guide you in your next steps. Often this session will involve viewing a couple of homes together. These initial tours will clarify your needs and wishes, narrowing down the search. While it’s always best — and fun — to visit a home in person, agents will also offer you a virtual tour option if that’s more convenient for you.
3. Apply for a Loan
It’s not too soon to submit a full application to a lender if you will need a mortgage. Having loan approval on hand ensures a realistic budget and maximizes your negotiating leverage when your dream home presents itself. Our friends at Day 1 Mortgage make this process effortless. You can get a quick overview using their online monthly payment calculator and affordability calculator. You can also start your application online.
A good lender should make your mortgage application as simple and seamless as possible while giving you a full range of home financing options. Real estate agents and loan officers should have a close working relationship. Our agents’ fingers are on the pulse of what’s going on in the mortgage world to help guide you through initiating the mortgage process and facilitating your transaction with the dependable lender of your choice.
4. Refine Your Search
Now the real fun begins! Armed with loan approval and more certainty about your purchase budget, it’s time to hunt for the perfect home. Our agents are local experts who have their feelers out 24/7, so when a great match hits the market, you’ll be one of the first to preview it.
Prioritizing is key. Make sure your agent has a list of your “must-haves” and “nice-to-haves.” Must-haves differ for everyone, but often include number of bedrooms and bathrooms, location and type of home (condo, townhouse, single family).
Nice-to-haves might include special features like a fenced-in yard, a home theater, a pool. Your nice-to-have list may be the tiebreaker if you are having a hard time choosing among your final selections.
5. Make an Offer
You’ve found “the one!” How can you make it yours? Your agent will help you structure an offer that positions you to purchase your home with the best terms possible. Your agent can run comparables (“comps”) which will identify similar homes in your market to help you determine an appropriate offer.
Next, you’ll need to decide what contingencies should be included. Examples of contingencies include home inspection, appraisal, financing and repairs. Keep in mind that in a seller’s market, the more contingencies you include could put your offer at a disadvantage against other offers. Your agent will advise you so that you have the best chance of beating out other offers.
Once your offer has been submitted, there may be a counter offer. Your agent will be your advocate throughout this back-and-forth process.
6. Ratify the Contract
Your offer has been accepted! It’s time to seal the deal with a real estate contract. An offer becomes a contract when both parties have signed. The contract is now binding for both buyer and seller.
However, the contingencies become “outs” for either side. Most contingencies are written to protect the buyer, allowing them to legally exit if something goes awry before closing.
Contingencies that protect the buyer might include the property passing a home inspection or the property appraising for the purchase price. An example of a contingency that protects the seller is a time limit on how long the buyer has to obtain their financing.
7. Order a Home Inspection
Even with a ratified contract, your agent’s work is far from over, as they now become a dedicated project manager, coordinating the many details that need to be addressed before you are handed the keys to your home.
Your agent will order a home inspection which will give you a comprehensive report of the property. Home inspection costs far outweigh the cost of possible home repairs, making this step a financially wise move. Even if you choose to waive the home-inspection contingency in an effort to sweeten the offer, it’s still advisable to schedule an information-only home inspection so you are fully aware of what you’re buying.
Home inspections check for a multitude of potential problems associated with your home, starting with the outside — including drainage issues, downspouts, roof, retaining walls, even landscaping. They will check the structure of the home, from foundations to windows, doors, chimneys and more. They’ll make sure all the mechanical components of the home are in good working order. Plumbing and electrical systems are also inspected.
As long as you have a home inspection contingency in your offer, you can renegotiate with the seller asking them to fix certain problems or lower the price. If the problems are more than you can handle, you can walk away from the deal.
8. Insure Your Investment
Once all the contingencies have been met, you’ll need to protect your investment with homeowners insurance. CENTURY 21 Redwood Realty’s insurance partner, We Insure Peace of Mind, can help you select the perfect coverage for your perfect home. They’ll show you rates and coverage from top-rated companies and give you a side-by-side comparison to protect your biggest investment.
9. Have a Seat at the Settlement Table
The finish line is just ahead. You’ve found your home, negotiated the deal and secured financing. You’re SO close to home ownership! You’ve also completed a final “walk-through” of your home, making sure everything is just as you expect it to be, including any repairs that needed to be made as a result of your home inspection.
There’s just one more hurdle to overcome: settlement. This can be intimidating since all involved parties are typically present and the stacks of documents and legalese can look formidable. Your agent and title company should ease your anxiety by working behind the scenes to make sure there are no errors. Any foreseen problems should have already been addressed.
They should make clear what paperwork you need to bring with you (proof of homeowners insurance, your copy of the home inspection report, etc.), and should be prepared to explain the proceedings thoroughly. They should be willing to patiently answer any questions you have while signing papers.
CENTURY 21 Redwood Realty partners with Highland Title + Escrow, an established title company that provides a custom settlement experience that is flexible, transparent and smoothly executed.
An added bonus: when you order your settlement with Highland, you can choose the traditional method of closing in person or remotely. A Designated Signing Agent Program allows you to approve and sign settlement documents without physically attending, by appointing a “signing agent.” Remote Online Notarizations are another way for you to sign settlement documents by using an e-Notary who will engage with you through video conferencing. You can then sign documents electronically.
10. Welcome Home!
You’ve got the keys! You’ve got the house! It’s time to move!
You can certainly breathe a sigh of relief and bask in the glow of home ownership, but frankly, moving can be a stressful process, too.
Your CENTURY 21 Redwood Realty agent will not abandon you! We partner with Home Concierge by MoveEasy, providing you support throughout your entire move. Your dedicated concierge will assist you with all moving and home maintenance needs.
Need help setting up your internet, cable, home security, utilities? We can help.
How about advice on top-rated moving companies and self-storage providers? We’ve got that, too.
We can create a personalized week-by-week moving checklist and reminder emails for all sorts of details like how to easily forward your mail to your new address, how to update your driver’s license and vehicle registration, and what home professionals have a proven track record and good reviews. You can even use your Amazon Alexa to access your FREE “Concierge for Life.”
Congratulations on achieving the American dream! This monumental accomplishment is absolutely worth it! Not only are you beginning to accumulate wealth and improve your credit score, you are improving your life. According to the National Association of REALTORS®, the benefits of homeownership include better mental and physical health, improved community engagement and higher educational attainments for the children of homeowners.
It’s worth the journey, and we’re here to help you every step of the way!
